Posted in Pursuit of Excellence

April 7, 2018

Items in italics are direct quotes from the articles below

https://www.investopedia.com/articles/stocks/11/figuring-out-which-stocks-follow.asp

More than 5,000 companies are listed on the Nasdaq and NYSE. How should an investor cast a wide enough net to not miss out on great opportunities, but keep the workload to a manageable level? It is better to focus on a much smaller list of companies, but go significantly further in understanding them. An investor may actually only need to know a few hundred companies and stocks to get through their entire investing life. The key, then, is for the investor to find a balance between knowing just enough to let good ideas come in through the door without being so distracted and spread thin that they risk “paralysis by analysis.” If the financial markets sometimes behave like a giant circus, then investors ought to consider a three-ring approach. This approach will help investors sort out their priorities, allocate their time most effectively and balance out the need to keep a broad perspective with the equal need to maintain focus and attain a deep working knowledge. It is important for an investor to make the most of the time available for research, and one of the best ways to do this is to research vertically (suppliers and customers) and horizontally (competitors).

If you’re researching one company, it makes sense to research its competitor. As far as deciding which stock to follow, divide them into three categories: closely followed stocks, casually followed stocks, and barely followed stocks. What is your investment strategy? What is your investment strategy for paper assets? Are you cash flow driven, or capital gains driven? Asking these basic questions of yourself will also help you build these categories. Personally, I invest in my 401k, I have a personal portfolio that I build over time, and I will occasionally day trade stocks. If you’re going to invest in paper assets, then create watch lists, and the last step may actually be the most fundamental to the entire process. A disciplined investor needs a disciplined process. Set aside time every day (or week) to do the requisite work — both researching new ideas and keeping up with developments in those names on the watchlist.
When you invest in the paper asset, you must understand that you are competing against hedge fund managers, seasoned investors, and credited investors. Stay calm and follow your strategy. If your strategy isn’t working, then find others to lean on. My lens is eternity and legacy. What is yours?

https://www.entrepreneur.com/article/307004

Let’s say you put together a business plan. You did the math to figure out exactly what you needed. You researched your small business loan options, diligently completed the paperwork and even did your little “good luck” dance as you clicked the “submit” button on your application. But then, your worst fears came true: You were denied that small business loan. Let’s face it: There’s almost nothing quite as discouraging for an entrepreneur as seeing your business dreams halted by the decision of a single lender. You might feel rejected, have no idea what to do next and even start to question whether your grand business plans were ever meant to come true in the first place. But here’s the good news: You may abandon your own body, but you must preserve your honour. Of the many entrepreneurs who are denied a small business loan after their first application, most do go on successfully obtain financing with later applications. The key is to figure out why your application was denied, take steps to improve your credit and financial standing and choose the right loan product for your business — before trying again. Don’t let a single denial hold you back from pursuing your small business goals! Here are the five steps you can take right now to ensure that your next business loan application results in a resounding yes. The five steps are: request an explanation from the lender, check your business and personal credit reports, take steps to improve your business standing, consider alternative loan products, and apply carefully the second time. It’s important when you get denied getting an explanation from the lender and understanding what specific concerns a lender has. It’s not only important to manage your personal credit scores with the three major credit bureaus. There are three major credit bureaus for business that you may not know. It’s important to have your vendors, creditors, even your landlords report the payment history to these three bureaus: Experian, Dun & Bradstreet and Equifax.

While your business and personal credit scores will typically be the most influential factors in a lender’s decision process, the internal financials of your business — particularly the strength of your annual revenue, cash flow and business savings — will also be considered. Taking an objective look at these factors from your lender’s point of view may help you to determine what steps you can take to either improve your financial standing or choose a loan product that will be a better fit. The best way to do this? Take a look at what’s called your debt service coverage ratio, or DSCR, for short. This simple formula is the tool that lenders use to determine whether your business has the necessary cash flow to make your loan payments consistently and on time.

Don’t know what a DSCR is? Here’s the basic formula you’ll need to calculate your debt-service coverage ratio, including your anticipated loan as part of your calculations:

Annual net operating income + depreciation and other non-cash charges

Divided by interest + current maturities of long-term debt

A debt service of less than 1 indicates that your business’s debt will exceed available cash flow, meaning your loan will surely be denied. Most lenders look for a higher DSCR — at least 1.25 — with a ratio of 1.5 or even higher being ideal. Even if you’ve been denied a small business loan because of a low DSCR, you may not be able to quickly increase revenue or reduce expenses in order to re-apply.

Working in banking, I know that DSC is the most important driver for loan origination. It answers the question does the Borrower have the ability to repay? Lending is investing in a business. If your business can hit that ideal mark in DSC, then you should seek alternative loan methods, and when you apply for your loan the next time be prepared.

If you need a financial check-up or prayer be sure to contact me.

This week, I’ve included Motivation To Get Up Early- BE UNCOMMON – Motivational Video from the Mulligan Brothers YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.”

Proverbs 28:26 MSG

Posted in Debt Free Me

Month End: January Snapshot


This month, I said I do and till death do us part to my best friend and my love. I’ll be honest! The wedding process is stressful. If you plan on doing an actual wedding that involves a venue and family, then you will spend money and you will at some point get frustrated. My wife and I are very low maintenance and low-key people, but even we found ourselves exhausted both emotionally and mentally when all was said and done. I’ve moved out of my parents’ home and into an apartment. I’ve had plenty of guy roommates, but now is the first time I’ve ever lived with a female. We’re growing used to living together, and as she gets accustomed to my quirks, and tendencies, every day I’m more and more thankful to God that she is in my life. She said yes to this mess.

At month end, she’s currently not working, and we’re living primarily off her medical retirement and a portion of my income, but thankfully we are both open about our finances and operate our business together. I’ve helped her sign on a new associate for her business, and I’m truly looking forward to what this new year will bring. Due to our honeymoon, I paid a little less than normal on my debt, but the important thing to remember is: if you are in debt, do not miss your payments, and do not let them go 30 days past due. Find a way to make money to pay your debt obligations. If you got yourself in this mess in the first place, it’s your responsibility to get out of it.

If you want to learn more about how I’m increasing my income, while reducing debt or if you want to have someone to discuss your debt reduction strategy with, or if you need a financial check-up, contact me.

The rich ruleth over the poor, and the borrower is servant to the lender.
https://bible.com/1/pro.22.7.kjv

I believe in your journey to….

A Debt Free Me

Here’s this month’s video